You'll be found guilty of tax evasion if you can't give SARS suitable answers to the three questions below

SARS will look for evidence that you tried to avoid paying tax or to reduce your tax liability when you weren't actually allowed to.

If there are two ways to achieve the same commercial outcome and you choose the one that offers a reduced tax liability, SARS can claim that you're intentionally seeking tax-avoidance benefits.

Question #2: What was the manner of the transaction?

Would a reasonable business mind find fault with the transaction? Was it carried out at arm's length? (i.e. the parties involved are independent of each other, so there's no question about a conflict of interests or benefits for friends!)

Question #3: What was the main purpose of the transaction?

Was it to hide your real intentions to escape the tax net or to score a tax benefit you're not entitled to?

If SARS isn't satisfied with your answers to these three questions, it'll find you guilty of general anti-avoidance or tax evasion.

To avoid the wrath of SARS, don't enter into transactions with the intention of avoiding tax or with the intention to get a tax benefit that's not allowed.

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